Abu Dhabi ShipBuilding was reported as winning a multi-million dirham contract from the UAE Coast Guard to build a dozen patrol boats. This is the Gulf News story today (which looks like it's a press release but I can't confirm that).
Dubai Eye radio is also reporting this as their main headline this afternoon. Must be a slow news day?
What's odd is that I didn't think this was very new news. There was a general report in February 2008 in DefenseNews.com about ADSB progress, that mentioned this deal. According to Defense News, the UAE Coastguard hired ADSB on 04 February 2008 to build the new boats ...
On Feb. 3, four Bahrain Coast Guard boats arrived for a mid-life refit and upgrade at ADSB’s yard in Mussafah ...
... The next day, the UAE Coast Guard hired ADSB to build a dozen 34-meter Al Saber patrol boats.
He declined to specify the value of the contract, but industry sources put it at about $200 million.
Estimated contract value of $200 million, or AED 734 million, spread over 2-3 years if they can build 4-5 boats per year. ADSB 2007 FY report has profit margin of only 6% , which if used as an estimator of earnings from this deal gives us about AED 44 million, or AED 15-20 million per year.
Additional EPS estimate = 0.078 - 0.104 dhs.
PE for 2007 is about 40 so that would indicate an additional 3-4 dhs on the share price . Except that PE is inflated because ADCB 2007 earnings were down due to some delayed income and changes in production schedule or something.
Average market PE is about 13-15, so if we use that, get an expected 1.00-1.50 dhs increase in share price. As it happens, ADSB share price rose by just under 1 dh from 4.32 to 5.29 at the end of February on larger than normal volumes, but it was at 5 dhs per share at the start of February anyway.
ADSB shares are up 2.4% to 5.19 today but from only 2 small deals.
Previous UAE Coast Guard order?
The Gulf News also reported on a deal between the UAE Coast Guard and ADSB in April and June 2006 but that was a different order (I think)...
... what's got me confused is that both the June 2006 story and the February 2008 story (and today's story) refer to the patrol boats as "Al Saber" but they appear to be different sizes.
Al Saber June 2006 - 12 fast patrol boats, Halmatic design, 16 meters
Al Saber February 2008 - 12 fast patrol boats, 34 meters
Gulf News 06 March 2008:
ADSB gets contract to build boats for Coast Guard
Staff Report
Dubai: Abu Dhabi Ship Building (ADSB), the Gulf's only specialised naval warship builder, has been awarded the Al Saber project, a multimillion dollar contract to build 12 patrol boats for the UAE Coast Guard.
The 34-metre boats, constructed in composite materials, will have a "mother-daughter" design. The "mother" vessel will have a stern ramp that will accommodate a smaller, high-speed, "daughter" boat that can be launched at sea to enable fast interception.
The patrol boats will be laminated in ADSB's new composite workshop at the company's Musaffah shipyard.
ADSB has begun the second phase of the composite facility with the construction of the outfitting workshop, which will cover 4800 square metres.
Bill Saltzer, ADSB's chief executive, said: "ADSB has been working hard towards securing this contract for some time and are delighted to have been selected as the builder of this new class of patrol boat. We thank the UAE Coast Guard for their co-operation and assistance during these discussions and we look forward to building these vessels through a continuing team approach."
The design for the vessel has been provided by the Coast Guard, which has also supplied the moulds for the hull, main deck and superstructure.
ADSB will build a second set of moulds to enable simultaneous building of multiple vessels (allowing delivery of four-five boats per year once in full production).
Engine
The patrol boats will be powered by twin marine diesel engines driving a conventional propeller and shaft arrangement. The design concept is for a modern heavy duty composite boat that is easy to operate and maintain.
This is the first major contract awarded to ADSB for the new composite facility. ADSB, a public joint stock company, has Dh2.5 billion in orders.
In the past 11 years, ADSB has built more than 100 new vessels in steel, aluminium and composites. The company also performs approximately 175-200 ship repair/refit jobs each year.
ADSB has been working hard towards securing this contract for some time and are delighted to have been selected."
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, which if used as an estimator of earnings from this deal gives us about AED 44 million, or AED 15-20 million per year.
. Except that PE is inflated because 
